Slide 5 of 11
- Retail distillate prices follow the spot distillate markets, and crude oil prices have been the main driver behind distillate spot price increases until recently. Crude oil rose about $17 per barrel or 40 cents per gallon from the beginning of the latest “up cycle” in mid February 1999 to mid-January, 2000.
- Over this same time period, New York Harbor spot heating oil rose about 42 cents per gallon, reflecting both the crude price rise and the beginning of a return to a more usual seasonal spread over the price of crude oil.
- The week ending January 21, distillate spot prices in the Northeast spiked dramatically to record levels, closing on Friday at $1.26 per gallon -- up 50 cents from the prior week. Gulf Coast prices were not spiking, but were probably pulled slightly higher as the New York Harbor market began to draw on product from other areas. The Gulf Coast heating oil spot price closed at 83 cents per gallon, an increase of 11 cents from the prior Friday. Crude oil rose about 4 cents from the prior week.
- Since then, New York Harbor spot distillate prices have been volatile. Prices initially peaked on Tuesday, January 25 at almost $1.36 per gallon before a brief weather respite and signs of cargoes coming to the East Coast encouraged buyers to begin to relax. By January 31, they fell to 82 cents, only to rebound again as cold weather and supply delays continued, peaking February 4 at $1.77 as weather continued to hinder re-supply. By Friday, February 11, prices had fallen below 80 cents per gallon, and remained below that level ever until February 25, when rising crude oil prices began to pull them upward again.
- What happened the week ending January 21 to set off this price spike?